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Author Question: QRM, Inc's marginal tax rate is 35. It can issue 10-year bonds with an annual coupon rate of 7 and ... (Read 82 times)

shofmannx20

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on: Jul 10, 2018
QRM, Inc's marginal tax rate is 35. It can issue 10-year bonds with an annual coupon rate of 7
  and a par value of 1,000. After 12 per bond flotation costs, new bonds will net the company 966
  in proceeds.
 
  Determine the appropriate after-tax cost of new debt for the firm to use in a capital
  budgeting analysis.
  A) 7.50 B) 4.87 C) 7.8 D) 2.62

Question 2

A discretionary form of financing would be
 
  A) accrued expenses. B) accounts payable.
  C) notes payable. D) A and B
Foundations of Finance ¦ Keown, Petty, Martin ¦ 9th Edition
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aham8f

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Reply #1 on: Jul 10, 2018
Answer to Question 1

B

Answer to Question 2

C


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